When private companies offer health insurance to their employees the insurance carrier they contract with requires...

When private companies offer health insurance to their employees the insurance carrier they contract with requires that all employees be obligated to participate and pay premiums whether they wish to or not. What problem is the health insurance company trying to avoid? How does this policy mitigate this problem?

Expert Solution

The insurance is trying to avoid a situation wherein only people who are vulnerable and.more likely to avail medical treatment opt for insurance and this increase the payout for the insurer significantly. By diversifying across individual, the chance of claim decreases and hence the insurer is able to offer insurance at a commercially viable rate.

This policy mitigate the problem by ensuring that all employees opt for insurance and this ensures that vulnerable as well as not so vulnerable section opts for the insurance and thus a necessary diversification happens.

jeff jeffy answered 2 years ago

If the contract requires the seller to ship goods by carrier but does not require that...

If the contract requires the seller to ship goods by carrier but does not require that the seller guarantee their delivery to a specific destination, when does risk pass from the seller to the buyer? Multiple Choice When the goods are delivered to the carrier. When the buyer receives the document of title. When the goods are delivered to the buyer. When the buyer has the power to take possession of the goods. Leroy ordered a DVD player for his...

Health insurance companies offer polices that strike a balance among three objectives: consumption smoothing for insurance...

Health insurance companies offer polices that strike a balance among three objectives: consumption smoothing for insurance purchasers, reduce incentives for overuse of medical services (moral hazard restraint), and guard against adverse selection. Explain consumption smoothing, moral hazard and adverse selection.

Would it be possible for private insurers to offer a form of private insurance that offers...

Would it be possible for private insurers to offer a form of private insurance that offers to pay loss of use/business interruption coverage to business organizations for their loss of income and continuing expenses for such future pandemic incidents. Your paper would have to discuss the characteristics of a pandemic and the appropriateness of such an event as an insurable loss for private insurers.

. As health insurance costs and the number of disabled employees increase, more companies are firing...

. As health insurance costs and the number of disabled employees increase, more companies are firing these employees. A survey of 723 employers found that 195 dismiss employees as soon as they go on long-term disability. Construct a 95% confidence interval for the proportion of employers who dismiss employees as soon as they go on long-term disability. Construct a 99% confidence interval for the proportion of employers who dismiss employees as soon as they go on long-term disability. Which interval...

Employees currently pay their own medical and health insurance premiums The company does not offer group...

Employees currently pay their own medical and health insurance premiums The company does not offer group life insurance The company would like to offer dependent care assistance under Sec. 129 for its employees What advice would you give the company President about starting a fringe benefit program for the employees? What are some of the tax benefits to the company and the employees? Would a cafeteria plan be an option for this company?

In a CIF contract, the ocean carrier needs to arrange the costs, insurance, and freight in...

In a CIF contract, the ocean carrier needs to arrange the costs, insurance, and freight in the transportation arrangement. (a) Comment whether this is a correct statement. (b) When the cargo was damaged, the insurance money will go to who.

are groups of health care providers that contract with employers, insurance companies, or third-party payers to...

are groups of health care providers that contract with employers, insurance companies, or third-party payers to provide medical care services at a reduced fee. A. PPOs B. ADDs C. HMOs D. DMOs q2. Employees at R&R Carpet and Tile are allowed to take one-hour lunch breaks.Tomas's assistant, Gabriella, took a two-hour lunch break today without prior approval. Gabriella has never broken any other rules since being employed by the company. R&R has a nonpunitive discipline policy. Which one of the...

The U.S. government subsidizes the private provision of health insurance through employers. Benefits paid to employees...

The U.S. government subsidizes the private provision of health insurance through employers. Benefits paid to employees are deductible as expenses by firms, but not recognized as taxable income by employees. Consider two employees, Ann and Bob, who work for two different employers. Ann earns $30,000, pays 15% in taxes, and pays $12,000 in premiums for health insurance offered by her employer. Bob earns $40,000, pays 25% in taxes, and has $12,000 worth of medical bills which he has to pay...

When firms decide to offer health insurance to their workers [for simplicity we assume they pay...

When firms decide to offer health insurance to their workers [for simplicity we assume they pay the full cost of the policy and do not ask for an employee contribution], they need to reconsider the wages they are willing to pay their workers. Assume the worker values the health insurance at full cost. Please use a labor supply and demand graph (as we covered in class) to analyze the effect of introducing insurance on the labor market. Part A: Show...

In countries with private and voluntary health insurance

In countries with private and voluntary health insurance, the principle of community rating means that the insurance companies are not allowed to charge a premium which differs among the costumers according to their health conditions. Explain why this principle may lead to a situation where a considerable part of the population chooses not to have health insurance.

Question